- Associated Press - Friday, June 26, 2015

OLYMPIA, Wash. (AP) - The House on Friday passed a measure that makes several changes to the state’s new recreational marijuana market, including eliminating the three-tier tax structure and replacing it with a single excise tax of 37 percent at the point of sale.

House Bill 2136 passed the House on a 59-38 vote and now heads to the Senate for consideration. An amendment that passed Friday removed language from the original bill that would have only allowed local bans on licensed marijuana businesses if approved by the jurisdiction’s voters. To encourage more cities and counties to allow marijuana businesses, the bill directs the state to share pot revenue with jurisdictions that do so. It would also allow them to adopt more flexible zoning for where pot grows and stores can be located.

The original bill had set the excise tax rate at 30 percent, and Rep. Reuven Carlyle, a Democrat from Seattle who sponsored the measure, said that he personally believes the 37 percent rate negotiated with the Senate “is a mistake.”

“But we find ourselves at a time of political addiction to the shaky perception of a new revenue pillar that is questionable at best,” he said, noting budget assumptions of how much the new market might bring to the state. “I acknowledge that it is irresistible to some. I think we will come to regret that.”

However, Carlyle praised many other elements of the bill, and noted that lawmakers will continue to tweak the system in years to come.

“The people of the state are looking for a well regulated and appropriately taxed system,” Carlyle said. “We have a responsibility to implement the spirit of the initiative, and I think in many ways we have done so.”

The passage of Initiative 502 in 2012 allowed the sale of marijuana to adults for recreational use at licensed stores, which started opening last year. Recreational businesses have complained that they’re being squeezed by medical dispensaries that have proliferated in many parts of the state, providing lesser- or untaxed alternatives to licensed recreational stores. Earlier this year, the Legislature passed and Inslee signed into law a measure that regulates the state’s medical marijuana system and reconciles the two markets.

Under the initiative for the recreational system, a previous three-tier excise tax system was set up to impose a 25 percent tax on the producer, a 25 percent tax on the processor and a 25 percent tax on the retailer. Under the measure that structure is compressed to one 37 percent tax at the point of sale at the retailer.

The 37 percent excise tax is one that everyone would have to pay, both medical marijuana patients and recreational users. However, under the bill, patients who are in a registry created under another bill passed by the Legislature earlier this year would be exempt from sales tax on their purchases.

The new measure allows counties and cities to reduce the current buffer zone around businesses from the current 1,000 feet to as little as 100 feet for recreation and childcare centers, public parks or transit centers, libraries and arcades. The 1,000-foot zone would remain in place for schools. The measure also bans marijuana vending machines, marijuana clubs and drive-thrus.

Rep. Cary Condotta, R-East Wenatchee, voted against the bill, expressing concern not only about the higher tax rate’s impact on medical marijuana patients, but also about the vote to remove the language requiring a vote of the people if a local jurisdiction imposes a ban, as several areas currently do. Condotta said drug cartels will target those areas.

“I want to get rid of crime, I want to get rid of the black market,” Condotta said.

Republican Sen. Ann Rivers, who was the sponsor of the medical marijuana regulation measure, said both measures are complimentary.

“It was about coming up with a comprehensive plan for the people of the state,” said Rivers, who noted she hoped the Senate would move quickly to vote on the House measure.

Lawmakers are in the midst of a special session that ends at midnight Saturday. If lawmakers are forced into a third special session to pass an overall state budget before the Senate takes action on the marijuana bill, the House would have to vote on the bill again because bills return to their house of origin at the start of each new session. Friday’s vote was the third on House Bill 2136, which passed in both the regular session that ended in April, and the first special session that ended last month.

Copyright © 2018 The Washington Times, LLC.

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